Question 5 The comparative balance sheets for Lisa Company appear below:...
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Question 5 The comparative balance sheets for Lisa Company appear below: Lisa Company Comparative Balance Sheet Dec. 31, 2021 Dec. 31, 2020 Assets Cash $.28.000 $13,000 Accounts receivable 18,000 14,000 Prepaid expenses 7,000 9,000 Inventory 25,000 15,000 Long-term investments -0- 18,000 30,000 (14,000) $85.000 I Equipment 60,000 Accumulated depreciation-equipment (18,000) Total assets $120.000 Liabilities and Stockholders' Equity Accounts payable $ 25,000 Bonds payable (2023) 37,000 Common stock 40,000 Retained earnings 18,000 Total liabilities and stockholders' equity $120.000 $ 7,000 45,000 23,000 10,000 $85.000 Additional information: 1. Net income for the year ending December 31, 2021, was $25,000 2. Cash dividends of $17,000 were declared and paid during the year. 3. Long-term investments that had a book value of $18,000 were sold for $16,000. Instructions 1. Prepare a statement of cash flows for the year ended December 31, 2021, using the indirect method. 20 Marks 2. Compute the following cash based ratios: 5 Marks a. Current cash debt coverage ratio. b. Cash debt coverage ratio
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